, NAIROBI, Kenya May 25 – Sameer Africa Ltd (SAL) has announced a pre-tax profit of Sh301 million in 2012, more than double the Sh148 million in 2011, with turnover increasing by 8 percent.
While addressing the company’s 44th Annual General Meeting at the company’s head offices, Managing Director Allan Walmsley attributed the good performance to favourable raw material prices, ongoing cost control efforts in the factory, and strong performance from Yana Tyre Centres.
“Raw material inputs, mainly raw rubber, declined by 10 percent owing to depressed demand in global markets. Impressive Gross Domestic Product (GDP) growth across East Africa as well as an increase in vehicle registrations for both new and second hand cars also favoured us he announced.
Export revenues increased by 18 percent in 2012 despite a myriad of challenges.
The company also managed to penetrate new markets in 2012 among them Zambia, Zimbabwe, Ethiopia and Sudan whilst maintaining a strong presence in South Sudan, Malawi and the Democratic Republic of Congo.
“The robust results were achieved without increasing retail selling price for Yana brand tyres but actually reducing the price of some of its products to maintain market share in the face of increasing competition,” Walmsley said.
Walmsley announced that one of the more successful products is the Yana Jeshi Extra 1400-20 tyres developed jointly with the Kenya Defence Force which continues to perform impressively in the ongoing Operation Linda Nchi in Somalia.
The company is however concerned at the continuing influx of cheap imported tyres which now control approximately 45 percent of the market, with concerns regarding their safety and suitability given the extreme demands of African road conditions.
Rising energy costs are also of major concern to Sameer Africa.
Energy costs rose by 20 percent in 2011 mainly due to a 27 percent increase in the cost of furnace fuel.
“We are refurbishing our number one boiler which should reduce furnace oil consumption by 15 percent, we are also exploring the possibility of introducing a solar energy and a coal fired steam generation facility which should further contribute to a reduction in energy consumption,” he revealed.
Walmsley said Sameer Africa plans to launch a variety of new Tyre products this year and to open new Yana Tyre Centers in Kenya, Tanzania as well as a depot and Tyre Centre in Burundi.
“We are also keen to raise export sales in 2013 so that they account for at least 20 percent of the company’s total revenue,” he revealed.
In November 2012, the board approved a first and final dividend payment of Sh0.25 per share.